The Federal Reserve couldn’t help itself, hiking rates another 0.75%. That part was obvious, but it’s what Chair Jerome Powell said after that’s weighing on the market…
Powell tries to act like he doesn’t care about the stock market, but he does — and that’s the only place his interest rate hikes are doing anything…
The hikes aren’t bringing down the Consumer Price Index, which gauges inflation. So it’s done nothing to help bring down rent, food or gas prices… The only thing they’re doing is creating an entire new wave of misery.
He missed his window to deal with inflation, and the best thing he could do is let the market sort it out.
The Federal funds rate is now 4%. In a nutshell, here’s what that means…
By and large, banks would rather deposit their money at the central bank and get that 4% return risk free. That’s a better deal to them than loaning you money for a mortgage, and risk you losing your job. It also means they don’t have to give loans to new businesses, which also comes with risk.
So if you want to grow as an economy, it’s a terrible place to be for too long.
Meanwhile, the two-year Treasury is at 4.7% — and that’s a good return. So people are selling stocks, adding to the market misery, to get into that risk-free return. So this is creating big, big problems.
The job market is also super strong, so that gives Powell more leeway to keep raising rates, hurting stocks more and more. It’s a vicious downward spiral.
But there are still opportunities. There’s one trade in particular that’s proven time and time again to be the “easiest” money in a terrible market…
Check out my video up top and let’s discuss this trade. I see a potential pullback next week that could provide a buying opportunity.* We have elections coming up, Black Friday and the holiday shopping season, so there are plenty of tradable events coming, so let’s discuss!
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P.S. This Political Shift Is Set to Cause a Massive Move in the Markets
The Republican takeover of Congress is about to cause a MASSIVE shift in a $54-trillion market…
And I’m sounding the alarm because I believe every trader MUST know this before the upcoming midterm elections.
So listen up because they’re just days away…
An electoral red wave is about to wash over America, and the Biden agenda could be toast.
Here’s How I Plan to Take Advantage
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
